FTC to Sites: Comply with Children's Privacy Law

FRAMINGHAM (07/21/2000) - The U.S. Federal Trade Commission (FTC) is warning Web sites that cater to children to comply with a new privacy law that took effect in April - or face its wrath.

This week, the FTC announced that it's sending e-mail messages to "scores of Web sites" that target children to alert the sites that they could face legal action as early as September if they don't comply with the Children's Online Privacy Protection Act (COPPA).

The law requires Web sites that get traffic from children under the age of 13 to post a privacy policy detailing any personally identifiable information that's collected from those children. That includes data required to register as a user of a site and even data children may reveal in chat rooms or on posting services.

The FTC aims to ensure that Web sites collecting personal data from children are complying with COPPA "and that kids' information is protected, not exploited," Jodie Bernstein, director of the commission's Bureau of Consumer Protection, said in a statement.

FTC staffers recently surfed the Internet to determine whether Web sites were in compliance with the act. They then sent e-mails to alleged offenders, according to an agency spokeswoman.

Violators could face civil penalties of $11,000 per violation, and the commission said it has a number of private investigations under way. The spokeswoman said she couldn't release specifics about the names or number of sites that were found to be noncompliant.

One site that claims to now be complying with the act is Beanie Babies manufacturer Ty Inc. In April, Ty didn't list its corporate contact information as required by COPPA, even though children can register to participate in online chats on the company's Web site. However, the Oak Brook, Ill.-based company now prominently posts its privacy policy and lists all pertinent contact information. The site also states that it adheres to COPPA.

Meanwhile, Santa Clara, Calif.-based Yahoo Inc., which operates Yahooligans, a Web guide for children, has been in compliance since May 1999, according to a Yahoo spokeswoman.

However, Yahoo and Ty appear to be exceptions to the rule. "A lot of sites have been lackadaisical," said Parry Aftab, a lawyer at New York-based Darby & Darby who has been working closely with the FTC on children's online privacy issues.

Aftab said many organizations tried to become COPPA-compliant by April 21 because they expected the FTC to crack down on them. But when the FTC failed to take action, "those sites basically thumbed their noses at the FTC because they felt there were no teeth in the law," Aftab said.

Not every consumer advocacy group supports the FTC's enforcement plans, however. A spokesman for Dallas-based EmailAbuse.org said the FTC is wasting taxpayers' money on enforcing legislation that misses the mark in protecting children's privacy.

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